FTT Token

Token

Impact

Gary

FTX, the collapsed digital asset exchange, has reached a settlement with the Commodity Futures Trading Commission (CFTC). This agreement, which awaits court approval, marks a pivotal moment in the ongoing FTX bankruptcy saga that has captivated the crypto industry since late 2022. The settlement involves a complex arrangement concerning a $4 billion CFTC claim and introduces a new mechanism for potential additional compensation to affected cryptocurrency holders.
<h2 id="ftx-settlement-with-cftc-impact-on-creditors">FTX Settlement With CFTC &amp; Impact on Creditors</h2>
FTX, the now-defunct <a href="https://coingape.com/cryptocurrency-exchanges/" target="_blank" rel="noopener noreferrer nofollow">cryptocurrency exchange</a>, has reached a settlement with the Commodity Futures Trading Commission (CFTC) in a significant development for its ongoing bankruptcy case. The agreement, which still requires court approval, involves the subordination of a $4 billion CFTC claim to creditor claims and interest.
Under the terms of the settlement, the CFTC’s $4 billion claim will be allowed but ranked below all other creditor claims and interest payments. Any funds that would have gone to the CFTC will instead be directed to a Supplemental Remission Fund. This fund is designed to provide additional compensation to adversely affected <a href="https://coingape.com/glossary/cryptocurrency/" target="_blank" rel="noopener noreferrer nofollow">cryptocurrency</a> holders, but will only be activated after all creditors are paid with interest and if surplus funds are available.
<img decoding="async" class="aligncenter wp-image-207356" src="https://coingape.com/wp-content/uploads/2024/07/ftx-1.jpeg" alt="" width="398" height="311" srcset="https://coingape.com/wp-content/uploads/2024/07/ftx-1.jpeg 1088w, https://coingape.com/wp-content/uploads/2024/07/ftx-1-300x235.jpeg 300w, https://coingape.com/wp-content/uploads/2024/07/ftx-1-768x601.jpeg 768w, https://coingape.com/wp-content/uploads/2024/07/ftx-1-150x117.jpeg 150w" sizes="(max-width: 398px) 100vw, 398px">
The settlement follows a District Court order by Judge Kaplan, which imposed a $4 billion disgorgement and $8.7 billion restitution to creditors. As part of the agreement, FTX debtors will receive dollar-for-dollar credit against the disgorgement order.
A key aspect of the settlement is its recognition that creditors with cryptocurrency-related investments have been particularly harmed by the alleged illegal conduct. This acknowledgment is partly attributed to the impact of over 200 victim statements sent to Judge Kaplan by FTX victims.
<img decoding="async" class="aligncenter wp-image-207357" src="https://coingape.com/wp-content/uploads/2024/07/ftx-2.jpeg" alt="" width="369" height="331" srcset="https://coingape.com/wp-content/uploads/2024/07/ftx-2.jpeg 1042w, https://coingape.com/wp-content/uploads/2024/07/ftx-2-300x269.jpeg 300w, https://coingape.com/wp-content/uploads/2024/07/ftx-2-768x690.jpeg 768w, https://coingape.com/wp-content/uploads/2024/07/ftx-2-150x135.jpeg 150w" sizes="(max-width: 369px) 100vw, 369px">
However, the settlement has not been without controversy. Some creditors have argued that the FTX bankruptcy estate is effectively using victims’ assets to pay government fines. These fines, they contend, result from FTX’s misrepresentations to the CFTC and are being paid before fully compensating the victims at current market prices.
Also Read: <a href="https://coingape.com/anti-crypto-sec-commissioner-renomination-to-be-on-hold-until-us-elections/" target="_blank" rel="noopener noreferrer nofollow">Anti-Crypto SEC Commissioner Caroline Crenshaw’s Renomination to Be On Hold</a>
<h2 id="restructuring-plan-and-ftt-token-holders">Restructuring Plan and FTT Token Holders</h2>
On the other hand, recent development has shown that the <a href="https://coingape.com/ftx-restructuring-plan-hits-roadblock-for-ftt-token-holders/" target="_blank" rel="noopener noreferrer nofollow">FTX restructuring plan</a> has encountered obstacles, particularly for holders of the FTT token. The official committee of unsecured creditors announced that FTX debtors are using Kroll, a third-party administrator, to distribute voting materials and comments to creditors and customers.
A significant aspect of this process is that users who filed claims solely based on FTT holdings are automatically considered to reject the restructuring plan and are not given voting rights. However, these claimants can still opt into the plan releases. Customers with claims involving fiat currency, other tokens, or cryptocurrencies beyond FTT should receive a ballot for voting on the plan.
Also Read: <a href="https://coingape.com/coinbase-vs-sec-coinbase-pushes-subpoena-gary-gensler-despite-recent-setback/" target="_blank" rel="noopener noreferrer nofollow">Coinbase Vs. SEC: Coinbase Pushes To Subpoena Gary Gensler Despite Recent Setback</a>
The post <a href="https://coingape.com/ftx-reaches-settlement-with-cftc-4b-claim-subordinated/" rel="noopener noreferrer nofollow">FTX Reaches Settlement With CFTC, $4B Claim Subordinated</a> appeared first on <a href="https://coingape.com" rel="noopener noreferrer nofollow">CoinGape</a>.

FTX Reaches Settlement With CFTC, $4B Claim Subordinated

Table of Contents

Coingape News Media

Other articles published on Jul 13, 2024

Ripple CLO Reflects on First Anniversary of Positive Court Ruling

Sygnum Bank Launches Multi-Asset Instant Settlement Network Dubbed Sygnum Connect

Leading-Edge Crypto Projects for July 2024

MoonBag Scalability Stands Out After $3.4 Million Funding Round, as EOS and Aptos Face Uphill Bat...

Solana Poised for August Breakout: Analyst Predicts Summer Surge

OpenAI is reportedly working on a new model codenamed Strawberry

Join our free newsletter for daily crypto updates!